A person borrows money at i^(12) = .12 from Bank A, requiringlevel payments starting one month later and continuing for a totalof 15 years (180 payments). She is allowed to repay the entirebalance outstanding at any time provided she also pays a penalty ofk% of the outstanding balance at the time of repayment. At the endof 5 years (just after the 60th payment) the borrower decides torepay the remaining balance, and finances the repayment plus thepenalty with a loan at i^(12) = .09 from Bank B. The loan from BankB requires 10 years of level monthly payments beginning one monthlater. Find the largest value of k that makes her decision torefinance correct.
